budget final ppt

8/2/2019 Budget Final Ppt

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CENTRAL BUDGETING AND

FUNDING


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PRESENTED BY

Dr. Umesh Mishra (11)

Dr. Anita Chaudhery (02)Dr. Rashmi Dwivedi (07)


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Indian central Budget

The Union Budget of India also called the general India budget ispresented each year on the last working day of February. The budget

is presented by the Finance Minister of India in Parliament. Budget ismost economic event in the country which outlines all the economicplanning of the Government of India for the next year. It is not onlyimportant for corporates but for individuals from all sections of the

society.

Origin and History

The first general budget of India was presented by the India's firstFinance Minister Sir R.K. Shanmugham Chetty on November 26,

1947. Since then, 28 Union Finance Ministers have been presentingthe budget every year. Initially, much attention was given to theagricultural sector but as later on, the focus shifted to the other

sectors including the industrial, financial and other sectors.


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State Level Budget

Each state government maintains its own budget, prepared bythe state's minister of finance in consultation with

appropriate officials of the central government. Primary control over state finances rests with the state

legislature in the same manner as at the central governmentlevel.

State finances are supervised by the central government,however, through the Comptroller and the Auditor General ofIndia; the latter reviews State Government accounts annuallyand reports the findings to the appropriate state governor forsubmission to the State's Legislature.

The Central and State Budgets consist of a budget for currentexpenditures, known as the budget on revenue account, anda capital budget for economic and social developmentexpenditures.


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Separate Budget for Railway and Postal

Department

The Indian Railways, the largest Public-Sector

Enterprise, and the Posts and Telegraph

Departments have their own budgets, funds, and

accounts.

The appropriations and disbursements under their

budgets are subject to the same form of

parliamentary and audit control as othergovernment revenues and expenditures.

[email protected] 5


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[email protected] 6

Procedure For Passing of Budget

The annual India budget has to be passed by the House ofthe parliament before it can come into effect on April 1,

the start of India's financial year.

The Indian parliament has one month to review and

modify the government's budget proposals.

If by April 1, the parliamentary discussion of the budget

has not been completed, the budget as proposed by the

minister of finance goes into effect and subject toretroactive modifications after the parliamentary


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Central Budget Structures Overview

The House 1 budget is loaded prior to the beginning

of the fiscal year. This serves as the effective budget

until such time as the GAA is approved in law. If the

GAA is adopted late, ANF may choose to allot funds

for spending as necessary using the House 1 budget

figures supported by an adopted interim budget.Once the GAA is approved, the House 1 budget is

backed-out and the GAA figures are loaded to

reflect the current fiscal year original budget.


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Health budget

The federal budget is on an unsustainable path, primarily because of

the rising cost of health care.

Projected Federal Spending Under One Fiscal Scenario

(Percentage of gross domestic product)

d ffi !


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Budget Office!

Mission

To provide prompt and accurate financial services to

the University, to include oversight ofdepartment/college budgets, advice on proper use ofState funds, timely processing of budget documents,and effective reporting of expenditures and revenue.

Responsibilities

The Budget Office is responsible for budget planning,administration and reporting. This includes preparationand loading of the campus budget; (i.e. original,permanent new funds, one-time funds, ProjectAuthorizations, Professional Development Grants, etc.),monitoring expenditures, setting up new accounts,logging and verifying Personnel Transaction Forms,assisting


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PRINCIPLES FOR BUDGET CUTS

Most of these principles have, in the past, been broadlyshared, and feedback received from various groups, includingthe Budget Council, the Faculty Senate, the AdministrativeCouncil, and union representatives, as well as in opensessions for faculty and staff.

Seek from faculty, staff, and administrators recommendationson possible cost saving efficiencies from business practices,

contracts that could be dropped or renegotiated, and/orareas of work that can be reduced, slowed, or eliminated.

As much as practical, consider the budget reduction to occurover a several year period by thoughtfully employing this

years resources in light of likely future cuts.

Employ significant, but prudent, share of the UniversityContingency Reserve in making budget reductions.


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To the extent practicable, safeguard faculty and staff inpermanent positions.

Depending on the size of the budget cut, reductions in

course choice and timing are likely; however, to theextent possible, protect the ability of students to makenormal degree progress.

Pursue revenue enhancements and diversifying the

Universitys resource streams by increasing gifts andcontributions, grants and contracts, internationalenrollments, revenue from outsourcing and any CSUapproved student fee increase, as well as other

strategies, including possible website advertising.

Continue to position the University for the future bymaking select program investments in accord with the

University Strategic Plan.


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In the near term, curtail adoption and

implementation of new programs; where new

investments are necessary, offsetting savings from

current programs are likely to be required.

Keep an inventory of cuts and other

accommodations so that consideration may be

given to restoring funding in the future.

To assure there are no division budget reductions

that place unacceptable burdens on other divisions,

discuss the impact of budget cuts beforerecommending them.


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POSSIBLE BUDGET REDUCTION

STRATEGIES

Reduce and/or delay equipment purchases.

Freeze vacant positions.

Reduce general fund supported travel.

Reduce general operating expenses. Closely review all service contractse.g., Hershey,

Hobson, Oracleand all organizational

memberships, stipends, and special consultants. Reduce work schedules if employees prefer, e.g., 12

months to 10 month employment and voluntary

furloughs.


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Emphasize recycling and energy savings, e.g.,

reduced operating hours and adjusted lighting and

temperature levels. Review all appliance usage and

costs.

Defer maintenance that doesnt put the campus at

serious risk.

Combine organizational units to achieve efficiencies

and/or where there is overlapping of

responsibilities, including colleges, divisions,

programs, and offices. Reduce assigned time and/or sabbaticals, and

possibly deny sabbaticals shorter than one year.


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Reduce workforce, where applicable, within

collective bargaining agreement rules.

Suspend or eliminate low enrollment and other

programs.

Review and adjust as appropriate the opening hours

of the library, health center, computer labs, and

other service units.

Hold retreats and other university events on

campus.


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Reduce FTES target.

Review and adjust as needed the number of

positions in administrative offices.

Scale back student recruitment and other outreach

efforts.


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Know the Budget

The Economy Survey 2008-09

What is Budget?

How is budget formulated?

Budget assumptions

Budget Proposals In nutshell


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Key Figures from the 2009/10Federal Budget of

Republic of India

And Export Highlights


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Budget Facts

Final Budget for Year 2009-2010

Presented By Honb. Finance Minister Mr.Pranab Mukharji

Put on Desk as on 6th

July , 2009


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Key Facts of Economy

Name of Economy :- Republic of India

Type of Economy :- Open Economy **

Size of Economy :- $ 1 Trillion

Population :- 1.15 Billion

GDP 2008-09 :- Rs.53,21,753 crore


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Growth Rate

Growth Achieved in 2008-09 ( Non Audited ) is6.7 %

Target was set at 9.0% for 2008-09

Slowest Growth rate in 6 years

Target set for 2009-10 is 8.0%


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Budget Estimates for 2009-10

Total Receipts :- Rs. 10.21 Trillion

Revenue Receipts :- Rs. 6.14 Trillion

Capital Receipts :- Rs. 4.06 Trillion Borrowings & Liabilities :- Rs.4.01 Trillion

Total Expenditure :- Rs. 10.21 Trillion

Plan Expenditure :- Rs. 3.25 Trillion Non Plan Expenditure :- Rs. 6.96 Trillion


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Democracy is the art and science of

mobilising the entire physical, economic and

spiritual resources of various sections of

people in the service of the common good ofall.

Arthasasthra, Kautilya quoted by the FM in

Budget speech


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Economic Survey The Economy sees signs of revival

Growth at 6.7% of GDP Predicted growth -7.75% subject to global economic recovery

Agri growth 1.6%

Industrial growth: 2.4% -Mfr: 2.3%;

Mining:2.3%;Electricity:2.8% Credit 17.3%

Savings rate 37.8% of GDP (07-08)

Investment rate 39.3% of GDP (07-08)

Households covered under NREGP 4cr

Dip in Private consumption

Dip in Exports significantly.


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The Survey adds

Growth path takes a U-shape Tax structure may be simplified

Support for commodity derivatives market

Higher FDI in Insurance could be proposed

PSU disinvestment may be pushed Fiscal Deficit 4.8%

1.4% of large projects ahead of schedule while 50.7% aredelayed

Power sector in Govt. growth was just 2.3% while in privatesector 12.1%

Reform subsidies


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Financial Sector- Survey suggestions Reform regulatory regimes: Bring all financial regulations under SEBI

Passage of the Banking regulations Bill 2005

Liberalise and develop spot and futures currency markets ( exchange traded)

Introduction of repos and derivative in corporate debt

Introduce standardised credit default swaps tradable on exchanges

Auction rights to commercial borrowing within already defined limits, with

in-built preference for long term borrowing; auction of rights to invest ingovt.securitiies by FIIs

HNIs could be allowed to register and invest directly through authorisedIndian Investment intermediaries

Align voting rights in Banks with equity holdings

Allow trading of direct credit obligations among banks and other financial

institutions Link small savings rates of interest to government debt instruments or bank

deposit rates of similar maturity.


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What is a Budget?

It is an estimate of future revenues and expenditureover a specific period. Budgets are usually preparedon annual basis for governments both Centre andState and annual and monthly basis for business

enterprises.

It is convention to present it on the last day of Februaryevery year preceded by Economic Survey of the year.During the current year however it is presented this

month because of the Government coming to powereffectively after the elections in May 2009.


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Budget Nomenclature Annual Financial Statement: Governments receipts and expenditure

presented to the Parliament Consolidated Fund; Contingency Fund; andPublic Account

Consolidated Fund: Summation of all revenues, money borrowed andreceipts from loans it has given. All State expenditure is given fromthis fund

Contingency Fund: Any urgent and unforeseen expenditure is metfrom this Fund and is at the disposal of the President of India.

Public Account: It is a collection of deposits like the Public ProvidentFund.

Consolidated Fund is split into revenue and capital budgets.

Revenue Budget consists of all revenue account; Capital budget or capitalaccount includes non-revenue receipts and expenditure.

Revenue Account: All receipts like taxes and expenditure like salaries,subsidies, interest payments that does not involve creation of any assets

Capital account: Receipts from liquidating (selling) assets or shares of apublic sector company and spending to create assets and lending toreceive interest.


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Taxes Direct Taxes: Taxes that you and I pay to the Government directly:

income tax; wealth tax; Gift tax, Fringe Benefit tax (FBT), Securities

Transaction Tax,etc Indirect Tax: It is essentially a tax on our expenditure; like customs,

excise, and service tax

Corporate tax is the tax that all companies pay on their profit

Excise Tax: Tax levied on all manufactured goods

Minimum Alternate Tax: (MAT) If a company pays less than 10% of itsprofits as income tax, it has to pay a minimum of 10% on bookprofits. (2009-10 Budget changed this percentage)]

VAT and GST: Value added is a transparent form of tax on the salesbased on the difference between the value of inputs used to produceparticular goods and the output produced; Goods and Services Taxon the other hand, contains the entire element of tax borne by agood including a Central and State level tax.

There are also non-tax revenues: Dividends of the PSUs; revenuesfrom the public services etc.


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ExpenditureA Central Plan is the Governments expenditure that includes a

five-year road map. This is met both from budget and non-budgetary sources (State owned enterprises) Governmentssupport to the Central Plan is known as Budget support.

Plan expenditure: It is the amount the centre sets aside to Statesand UTs split into revenue and capital components in additionto the budget support.

Non-Plan expenditure: All those bills the government has to payunder the revenue expenditure: interest payments,subsidies, salaries, defense and pension. Most of the capital

expenditure goes for Defense.


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Deficits Revenue Deficit: Ideally all revenue expenditure must be met from

revenue receipts. Where it falls short, it has to raise a debt from thepublic.

Primary Deficit: Fiscal Deficit-Interest payments on earlier borrowings. Ifthis is growing it means that our fiscal strength is bad.

FRBM Act 2003 specifies that revenue expenditure shall be met fully out ofrevenue receipts only. Any borrowing should be done only to meet capitalexpenditure. The Act also mandates 3% fiscal deficit after 2008-09 in orderto maintain fiscal stability. The global financial crisis and our economys

melt down has forced to abandon this fiscal discipline in 2008-09. Now theFiscal deficit is 4.8% and is expected to rise to beyond 6%.

Fiscal Deficit: Living beyond the means

Non-borrowed receipts-(revenue receipts+ loan repayments+miscellaneous capital receipts, primarily disinvestment proceeds)falling short of expenditure. The excess of total expenditure over total

non-borrowed receipts is called fiscal deficit.


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Rural and Agriculture Sectors

Allocation under NREGP hiked to Rs.39100cr (144%)

Target of Farm Credit Rs.3.25cr (up from 2.87cr)

Allocation for PM Gram Sadak Yojana up by 59% to Rs.12000cr

Direct transfer of fertiliser subsidy to farmers Accelerated irrigation benefit programme hiked from interim

budget by Rs.1000cr.

Rural Employment gets a boost


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Banking: Focus on Inclusive Growth

Rs.100cr to expand rural branches

No-frills accounts under Financial inclusion to expand

SHG-Bank linkage programme to cover 50% of women in nextfive years

Rs.4000cr to SIDBI from RIDF funds for giving boost to MSMEsector.

First time repayment culture is recognised by the Governmentwhen it extended 1 percent subvention to farmers whopromptly repay their loans to Banks.


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Infrastructure

60% refinancing of PPP projects (financed by the commercial

banks) by the IIFCL;

23% increase in National Highways Development Programme

Allocation under JNNURM up by 87% to Rs.12,887cr

160%hike in allocation to Accelerated Power Development

and Reform Programme

REC to accelerate the Rural Gramin Vidyudikaran Yojana


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Education and Health Sectors National Female Literacy Mission to be launched

Student Loans to weaker sections: Over 5lakh students to

benefit Grants in aid to minority education institutions and national

fellowships for students from the minority community

Allocation to Aligarh Muslim University to establish itsbranches in WB and Kerala

Modernization of Employment Exchanges in PPP mode toensure job seeker registration on-line

National Rural Health Mission Interim Budget outlay ofRs.12070cr hiked by Rs 2057cr.

National Action Plan on Climate Change would be launched.

National Ganga River Basin Authority and National River andLake authority allocated Rs.335cr.


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Direct Tax ProposalsPersonalIncomeTax(Individual; HUF ArtificialJuridical Person)Basic Tax Exemption

Limit (in INR- Lacs)No Surcharge onPersonal Income Tax(to be removed inphased manner)

(persons covered:Firm and LocalAuthority also) (AY2010-2011)

Assessees Earlier(2)009-10)lakhs

Changed(20010-11)lakhs

Sr.Citizen 2.25 2.40

Women 1.50 1.80

Others 1.50 1.60


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Other Taxes

MAT increased to 15% from 10%, carry forward expenditureto 10years

Fringe Benefit Tax abolished

Commodity Transaction Tax abolished

Taxation on LLPs to be same as for Partnership companies

Extension of benefits of sunset clause under Sec 10A and 10Bfor EOUs and those in Free Trade Zone

Deduction in respect of contribution to political parties

Tax benefits of New Pension policy available to private/publicemployees only

Service tax coverage extended to Continental shelf of Indiaand Export Economic Zones


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Estimates

Fiscal Deficit to be 6.8% of GDP compared to 2.5% last fiscal

Total expenditure goes up by 36%

Food Security Act to be introduced: People below poverty lineto be provided rice and wheat up to 25kg per month.

Defence outlay hiked to Rs.1,41,703cr from Rs.1,05,600cr. Interest payments would be 36% of non-plan expenditure.

(R.2.25lakh crores)

Unique Identity Number to be issued to all citizens to improve

access to citizenship services universally in the next two years.Allotted Rs.500cr.


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Comments

Budget is one of missed opportunities Fillip to investments lacking

Direct input subsidy other than fertilisers not mentioned

No strategy to achieve the budgeted agriculture growth of 4%

p.a without which the 7.25-7.75 percent growth of economycannot be ensured

Steps for improving manufacturing sector growth are alsofound wanting

The Rs.100 per day minimum wage under NREGS although

welcome from the overall wage security angle, would increasethe farmers wage bill

No measures to contain the ever-rising food bill of thecommon man.

No mention of Bankruptcy Law and other important Laws

affecting the financial and corporate sector to give boost toreforms.


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Budget Deficits

Fiscal Deficit :- Rs. 4.01 Trillion

Fiscal Deficit :- 6.08 % of GDP

Revenue Deficit :- Rs. 2.83 Trillion

Revenue Deficit :- 4.83 % of GDP

For 2009-10


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For 2009 10

Revenue receipts expected to be in line with budgeted

estimates for current year Rs. 609551 crores compared to Rs.602935 crores.

Tax revenue projected lower than current years budgeted

estimates, but higher than the revised estimates.There has been growth in non-tax revenue in 2008-09, this isassumed to continue in the year ahead, this includes intereston loans, dividends and profits of PSUs, royalty on offshore

crude oil and gas production, charges for services provided bygovt etc.

Huge borrowing continues.


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Receipts and expenditures estimated to be 6% higherthan the revised estimates for 2008-09.

Fiscal deficit therefore estimated at 5.5% of GDP andrevenue deficit at 4% of GDP

Stress in budget speech on social sector, ruraldevelopment, infrastructure, highways etc.

BUT No major change in social sector spending from lastyear despite budget speech claims


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What about the Fiscal Deficit

worry?

It remains such high fiscal deficit numbers willimpact economic growth down the road.

Flip side is the expenditure on infrastructure andrural development can work to providing incomes

and employment potential for growth.

Govt. should concentrate on more effectiveutilization of funds.


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Why has the stock market reactedunfavourably?

Stock market reaction unreal. plunges 3% as budgetdisappoints

But, there was no need to raise expectations for anythingvery differentas Pranab Mukherjee says, There is nomandate to tweak taxes.. I cant indulge in recklessborrowing.


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(In Crore of Rupees)

2008-2009Budget Estimates

2008-2009Revised Estimates

2009-2010Budget Estimates

1. Revenue Receipts 602,935 562,173 609,551

2. Tax Revenue(net to Centre) 507,150 465,970 497,596

3. Non-tax Revenue 95,785 96,203 111,955

4. Capital Receipts (5+6+7)$ 147,949 338,780 343,680

5. Recoveries of Loans 4,497 9,698 9,725

6. Other Receipts 10,165 2,567 1,120

7. Borrowings and other Liabilities $ 133,287 326,512 332,835

8. Total Receipts (1+4)$ 750,884 900,953 953,231

9. Non-plan Expenditure 507,498 617,996 668,082

10. On Revenue Account of which, 448,352 561,790 599,736

11. Interest Payments 190,807 192,694 225,511

12. On Capital Account 59,146 56,206 68,346

13. Plan Expenditure 243,386 282,957 285,149

14. On Revenue Account 209,767 241,656 248,349

15. On Capital Account 33,619 41,301 36,800

16. Total Expenditure 750,884 900,953 953,231

17. Revenue Expenditure 658,119 803,446 848,085

18. Capital Expenditure 92,765 97,507 105,146

19. Revenue Deficit (17-1) 55,184 241,273 238,534

% of GDP 1.0 4.4 4.0

20. Fiscal Deficit 133,287 326,515 332,835

% of GDP 2.5 6.0 5.5


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STATISTICS


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[email protected] 50


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Is this a Good Budget?

Given the circumstances, it is a sensiblebudget.. major changes can be made in June,with revised numbers depending on thescenario as it unfolds.

Full scale budget in a few monthsthatswhere the action should be, if at all


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This is a Rs.10lakh crores and above

Budget, the largest sinceindependence.


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THANK YOU

budget final ppt

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